CITATION: Letang v. Hertz Canada Limited, 2015 ONSC 72 COURT FILE NO.: CV-10-412496 DATE: 20150106

SUPERIOR COURT OF JUSTICE - ONTARIO

RE:

MATTHEW LETANG and 2213922 ONTARIO INC. O/A PENINSULA RENTALS

Plaintiffs

-AND-

HERTZ CANADA LIMITED, THE HERTZ CORPORATION, HERTZ SYSTEM, INC. and HERTZ INTERNATIONAL, LTD.

Defendants

BEFORE: F.L. Myers J.

COUNSEL: Neil Rabinovitch for the plaintiffs

Mel Hogg for the defendants

HEARD: January 5, 2015

endorsement

Background

[1] By handwritten endorsement dated January 5, 2015, I dismissed, with reasons to follow, the defendants’ motion to adjourn for at least ninety days the trial of this action that is scheduled to begin next Monday, January 12, 2015. These are my reasons for doing so.

Facts

[2] The plaintiffs issued the Statement of Claim on October 18, 2010. They seek damages of approximately $3.5 million in connection with allegations that the defendants failed to enter into a franchise relationship with the plaintiffs despite written agreements requiring the defendants to do so.

[3] At a second pre-trial conference before Speigel J. on October 27, 2014, apparently Justice Speigel suggested that the plaintiffs deliver certain back-up financial documentation to support their damages claims and their expert evidence. The plaintiffs had to obtain much of the information from third parties and produced some 465 pages to the defendants on December 3, 2014. The documents are mainly copies of cheques, cheque stubs, bank statements, and a few notes concerning financial calculations.

[4] The plaintiffs admit that the back-up documentation shows that they made errors in their financial statements and hence in their damages calculations. In addition, they say that the documents disclose that they are entitled to a further $120,000 in damages. There is no new head of damages claimed. The documents just go to support or amend the quantification of the claims as made.

The Parties’ Arguments

[5] After receiving the new documents, the defendants immediately sought the plaintiffs’ agreement to adjourn the trial to allow for further discovery. After some back and forth, by December 20, 2014, the plaintiffs refused to consent to adjourn the trial and they offered to produce Mr. Letang for further discovery prior to the scheduled trial date. The plaintiffs also offered to walk away from the claim for the additional $120,000 if that assuaged the defendants’ counsels’ request for an adjournment of the trial.

[6] The defendants’ counsel declined to proceed with discovery because the holiday season was upon them. They also advised that their expert – a member of a well-known accounting litigation support firm - had already left for holidays and would not be available until January 5, 2015. Therefore, they have been unable to ready themselves for the trial. They say that the new documents not only undermine the plaintiffs’ calculations but, if the same errors were made by Mr. Letang in a prior business, then the base case projections relied upon by the plaintiffs may also be fundamentally undermined. They say that it is unfair for them to be required to proceed to trial without thorough discovery and expert review of the new documents.

[7] The plaintiffs, by contrast, say that there is no rocket science at play. The documents may undermine some of their prior calculations and this is a matter for cross-examination and credibility at trial. The defendants have already had one adjournment of the trial. The defendants are a big company to whom the trial is a matter of course; whereas the plaintiff is basically an individual whose financial security is at risk. The plaintiffs want their day in court and do not want to suffer the stress and prejudice of further delays by the defendants.

[8] The defendants deny that delay and stress to a plaintiff is “prejudice” for the purposes of balancing the benefits and prejudices to the parties that may flow from the discretionary decision as to whether to adjourn the trial. Prejudice, they argue, must affect a party’s ability to prosecute his, her, or its case. It is the defendants, they argue, whose ability to present their case will be prejudiced if they do not have sufficient time to address the new disclosure. They say that they should be entitled to an adjournment and unlimited time for further discovery (on top of the two days of examinations for discovery that they have already conducted of Mr. Letang).

Analysis

[9] This motion raises issues flowing from the “culture shift” mandated by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7. It raises questions such as “What are the goals of the civil justice system?” and “When is enough, enough?”

[10] In Hryniak, supra, at para 1, the unanimous Supreme Court of Canada held that ensuring access to justice is the greatest challenge to the rule of law in Canada today. As a result of the increasing length and cost of civil trials, most Canadians cannot afford to use the civil courts. This threatens the rule of law and risks stunting the development of the common law.

[11] The civil justice system is based upon the fundamental value that the process of adjudication must be fair and just. This value, the Court held, cannot be compromised. But the Court went on to recognize, in para. 24, that undue process and protracted trials with unnecessary expense and delay “can prevent the fair and just resolution of disputes” [emphasis in original]. In para. 25 of Hryniak, supra, the Court held:

25. Prompt judicial resolution of legal disputes allows individuals to get on with their lives. But when court costs and delays become too great, people look for alternatives or simply give up on justice.

[12] The culture shift dictated by the Court then, is the recognition that a fair and just process “is illusory unless it is also accessible – proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure”. Hryniak, supra, at para 28.

[13] In the case at bar, the defendants have been provided with documents that undermine part of the plaintiffs’ damages calculations. There are 465 documents to be precise. I have been provided with copies. As noted above, they are mainly copies of cheques and stubs that back-up the plaintiffs’ calculations. There are some bank statements and notes as well. While in absolute terms, 465 documents may sound like a significant amount of information; it is not. In the information age, counsel, especially those with large firms as are involved here, routinely deal with cases with tens of thousands of documents. Dealing with large quantities of clients’ information is a core legal skill. Firms have sophisticated computer-based procedures to deal with really large document cases. Here, a junior lawyer will likely take a few hours to read the documents. What they will find is that the lawyers probably cannot deal with the mathematics without the help of their accounting experts. But the notes and letters between lawyers are readily understandable to counsel.

[14] It is important to note as well that these documents did not matter enough to the defendants to cause them to move for production of the back-up material on a timely basis. The documents were produced voluntarily by the plaintiffs late in the day at the suggestion of the pre-trial judge to foster settlement. The defendants received the documents and instead of providing them to their expert right away, they asked for an adjournment of the trial. They let that conversation go on without coming to Civil Practice Court until it was too late in the year for them to consider conducting discoveries or to make contact with the particular employee at their expert’s firm who was working on the matter. They did have time, however, to deliver a 3 volume motion record on December 24, 2014, returnable on January 5, 2015, to seek the adjournment of the trial.

[15] Moreover, the defendants’ counsel confirmed to the court that they did not ask the experts to make themselves available in the interim despite the looming trial date. The defendants have had a month to ask their expert to do a day or two of work allocating and adding up expenses. They did not ask him to do so or ask a senior partner at the firm for help if their expert was unreachable on holidays.[^1]

[16] The personal plaintiff has been available for examination for discovery throughout. The defendants did not want to undertake that step before they had their expert’s input. So they did what counsel steeped in the traditional Toronto motions culture do – they served a big, thick motion and waited for their adjournment.[^2]

[17] In a perfect world, perhaps the documents would have been made available by the plaintiffs months or years ago. But being inhabited by imperfect human beings, the world is not perfect – especially not the civil litigation world. Civil litigation is based on an adversarial model in Canada. The defendants had it within their power to seek the documents if they felt they were important. Now that the documents have being disclosed, with admissions harmful to the plaintiffs’ case, the defendants want more. They want unlimited discovery and, no doubt, they will seek production of similar documentation concerning the plaintiffs’ predecessor business in order to fish for the same types of errors at that company. What is the likely outcome of the proposed exercise? The documents will show some numbers relied upon by the plaintiffs’ expert were wrong. The correct numbers will be used and the credibility of the plaintiffs may be damaged as a result. At the end of the day, however, a very few of the actual documents themselves will really matter. All of the same effects can be achieved simply by cross-examining Mr. Letang and his expert on the correct numbers at trial. The defendants will not have the documents for the prior company and may have to argue by analogy. Cross-examination may yield admissions about the state of the plaintiffs’ financial knowledge and practices that could lead to the conclusion that the earlier company was similarly affected without seeing further historic back-up. However, if the trial judge determines that back-up documents are of sufficient importance to order more documents produced during the trial, it always remains open to him or her to do so. But none of this is a basis to give the defendants yet another adjournment of the trial.

[18] There does not need to be perfect disclosure and perfect discovery on every path and alleyway in order to achieve a fair and just outcome of the case on the merits. The Supreme Court of Canada has ruled that the goal of achieving a fair and just civil dispute resolution process becomes illusory unless it is proportionate, timely, and affordable. The idea that the defendants can ignore a trial date and sit on material for a month without bothering to call their expert and just deliver another fat motion record to buy 90 days of unlimited discovery time for more fishing for documents is old brain thinking. See Baghbanbashi et al. v. Hassle Free Clinic et al., 2014 ONSC 5934 at paras. 19 to 22. These are the types of practices that made the civil justice system unattainable for most Canadians and created the serious challenge to access to justice of which Karakatsanis J. wrote so eloquently. Delay and the distress that it brings to litigants do matter. Procedural gamesmanship, incessant delay, and discovery without end have brought the civil justice system to the brink of a crisis. There are real people behind lawsuits – even claims involving sophisticated corporations. These people are entitled to timely justice. Because the civil justice system does not deliver timely, affordable and proportionate justice, people are looking elsewhere for dispute resolution to the detriment of the public and the common law. Fixing the civil justice system requires a culture shift on the part of the players in the system. As Justice Karakatsanis wrote at para. 32 of Hryniak, supra,

While judges can and should play a role in controlling such risks, counsel must, in accordance with the traditions of their profession, act in a way that facilitates rather than frustrates access to justice. Lawyers should consider their client’s limited means and the nature of their case and fashion proportionate means to achieve a fair and just result.

[19] Proportionality requires a balancing. In this case, the fair and just result is to get on to trial next week. The defendants will have their full opportunity to undermine the plaintiffs’ financial evidence and credibility at trial. The defendants have had more than enough time to engage in a romp through financial back-up documents. There is minimal or no gain available by taking another 90 days compared to the harm of delay. Justice delayed is justice denied. The courts and the profession cannot implement a culture shift by continuing to operate on a “business as usual” basis. Courts and counsel must recognize that delay is itself a disease that eats away at the justice and justness of the system. The Court of Appeal has recognized the importance of prosecuting civil cases quickly in many cases dealing with dismissal for delay.[^3] But the last decade of efforts has proven that delay cannot be combatted successfully just by dismissing the oldest cases. Delay at all stages should be recognized as a serious form of prejudice that undermines affordability and proportionality and rots the uncompromisable goals of fairness and justice.

[20] Therefore, by handwritten endorsement, I dismissed the motion for an adjournment of the trial. I ordered the plaintiff, Letang, to attend for no more than two hours of further examination for discovery on Thursday, January 8, 2015. I also ordered counsel to appear before me for a Trial Management Conference on Wednesday, January 7, 2015 to discuss trial preparation issues. The court expects counsel to have agreed upon joint documents books and issues lists for trial by the time of that conference.

[21] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. The discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c ). The Court must consider as well as the application of the principle of proportionality (Rule 1.04(1)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v. Public Accountants Council (Ontario) 2004 14579 (ON CA), (2004), 71 OR (3d) 291 (Ont CA), at paras 26, 37. Considering these factors, it is reasonable and appropriate that the plaintiffs be entitled to their costs of the motion fixed at the sum of $3,000 all inclusive, payable forthwith.

________________________________ F.L. Myers J.

Date: January 6, 2015

[^1]: The notion of any responsible Canadian professional actually being unreachable in 2014 - especially one who deals with litigation – is not real. A simple email would no doubt have found him, no matter what part of the world he was traversing.

[^2]: The existence of the unhelpful motions culture in Toronto has been expressly recognized in the Toronto Region Pilot Practice Advisory – Civil Practice Court (October 14, 2014, in effect until July 1, 2015).

[^3]: See: for example, Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695; 1196158 Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544; and Faris v. Eftimovski, 2013 ONCA 360.